Key Takeaways:
Shares of Primoris Services Corp. (PRIM) plunged 28 percent in premarket trading after the company reported first-quarter results that missed analyst estimates and lowered its full-year profit forecast, triggering an investor lawsuit investigation.
“Our first quarter financial results reflected cost pressures on a limited number of renewables projects,” Koti Vadlamudi, President and Chief Executive Officer at Primoris, said in a statement. “We are actively managing these projects and expect them to reach substantial completion during 2026.”
For the first quarter, Primoris reported adjusted earnings per share of $0.59 on revenue of $1.6 billion. The results fell short of analyst consensus estimates of $0.84 in earnings per share and approximately $1.72 billion in revenue. The company cut its full-year adjusted earnings guidance to a range of $4.80 to $5.00, down from $5.80 to $6.00 previously.
The steep stock decline prompted law firm Block & Leviton to announce an investigation into Primoris Services for potential securities law violations. The firm's release noted the stock had fallen "over 45 percent," encouraging investors who lost money to make contact.
The company’s energy and renewables segment revenue declined about 13.8 percent in the first quarter. Management attributed the poor performance to unexpected delays in new project starts and slower financial closes for certain contracts. Despite the issues on a few projects, Vadlamudi noted that "the majority of our renewables portfolio continues to perform in line or ahead of expectations.”
In a move to diversify its business, Primoris announced it completed the $399.5 million acquisition of PayneCrest Electric on May 1. The deal expands Primoris’s exposure to the high-growth data center construction market.
Despite the negative financial update, retail investor sentiment on the Stocktwits platform turned ‘extremely bullish’, with message volume surging more than 1,000 percent in 24 hours. Some users pointed to the PayneCrest acquisition as a potential source of new contracts to offset weakness in the renewables division.
The guidance cut suggests near-term profitability will remain under pressure. The decline erases a significant portion of the stock's recent gains, though shares remain up over 55 percent year-to-date, far outpacing the 13 percent gain in the iShares Core S&P Small-Cap ETF (IJR). Investors will be watching for execution on the existing renewables projects and growth from the new data center business.
This article is for informational purposes only and does not constitute investment advice.
